By Benjamin Pimentel
The tech sector battled its way back from losses Tuesday, but not enough to keep the Nasdaq Composite Index from dipping into the red as shares of Electronic Arts Inc. declined.
Electronic Arts' (ERTS) stock fell more than 6% after the video-game publisher posted a wider quarterly loss and said it would cut as many as 1,500 jobs.
The tech sector got a boost from Amazon.com Inc. (AMZN) and Research In Motion (RIMM). Shares of Amazon were up 2.75%, while RIM gained 3.4%.
RIM got an upbeat review from Kaufman Bros. analyst Shaw Wu who reiterated a buy rating on the company saying, "We continue to believe the company is well positioned in the smart phone space with its vertical integration and superior push technology."
However, declines in other companies, including Palm Inc. (PALM), Cisco Systems (CSCO) and Nvidia Corp. (NVDA), took their toll as the Nasdaq struggled to stay in positive territory.
The tech-heavy benchmark fell 0.1% to close at 2,151. However, the Morgan Stanley High Tech 35 Index (MSH) and the Philadelphia Semiconductor Index (SOX) were each up a fraction.
The trading session had begun on a positive note for the chip sector following some upbeat views of the industry's direction.
FBR Capital analyst Craig Berger urged investors to "buy the chip dip," saying in a note that earnings-per-share "sensitivities suggest little downside to valuation troughs."
Caris & Co.'s Craig Ellis also wrote that "tech's overall inventory looks relatively benign, though we can't 'see' retail inventory, with prospects for seasonal or modestly better first quarter of 2010 chip maker revenue growth possible."